EUR/USD: dollar recovers its charm

EUR/USD Current price: 1.0892

The EUR/USD pair trades below the 1.0900 level following the release of German inflation, much worse than expected. December CPI came out negative, resulting in -0.1% against expectations of a 0.2% advance, while the year-on-year figure resulted at 0.3%. Earlier today however, the release of the Markit manufacturing PMIs of the region resulted quite encouraging, but the common currency is trading on sentiment this Monday, as worse-than-expected Chinese manufacturing data fell further in contraction territory, triggering risk aversion moves all across the financial boards: stocks plummeted in Asian and Europe, while American indexes are pointing to a triple digit negative opening.

The pair advanced up to 1.0945 as local share markets fell, but the greenback is recovering ground ahead of the US opening, and the release of the US manufacturing figures. Technically speaking, the 1 hour chart shows that the price is falling towards its 20 SMA, now the immediate support around 1.0880, while the technical indicators have retreated from overbought territory, in line with further declines. In the 4 hours chart, the price has accelerated below a bearish 20 SMA, while the technical indicators have turned south below their mid-lines, in line with the shorter term bearish tone.

Support levels: 1.0880 1.0845 1.0800

Resistance levels: 1.0910 1.0945 1.1000

GBP/USD Current price: 1.4759

View Live Chart for the GPB/USD

The GBP/USD pair fell down to 1.4691, below the 1.4700 level for the first time since April 2015, but managed to bounce higher, reaching 1.4815 before selling interest surged. Data coming from the UK showed that the December Markit manufacturing PMI fell below expected, printing 51.9, while mortgage approvals rose in November to 70.41K. Despite trading in a more limited range, the GBP/USD pair 1 hour chart shows that the price is above its 20 SMA, while the technical indicators have lost their bearish slopes in positive territory and before reaching their mid-lines. In the 4 hours chart, however, the technical picture is clearly bearish, with the price being capped by its 20 SMA and the technical indicators turning lower within bearish territory.

Support levels: 1.4740 1.4700 1.4660

Resistance levels: 1.4755 1.4790 1.4835

USD/JPY Current price: 119.20

View Live Chart for the USD/JPY

119.60 now caps. After falling down to 118.86, the USD/JPY pair is currently recovering some ground ahead of the US opening. The Japanese yen strengthened during the Asian session as local share markets plummeted, with the decline being exacerbated after the pair triggered stops below the 120.00 mark. Technically, the pair may correct further higher in the short term, as in the 1 hour chart, the technical indicators are heading higher from extreme oversold levels, yet the bearish trend prevails as the price stands far below its 100 and 200 SMAs. In the 4 hours chart, the technical indicators are also correcting extreme oversold readings, but as long as the price holds below 119.60, the risk well remain towards the downside.

Support levels: 120.00 119.60 119.20

Resistance levels: 120.35 120.70 121.10

AUD/USD Current price: 0.7185

View Live Chart for the AUD/USD

Antipodean currencies suffered the most from Chinese stocks' collapse, with the AUD/USD pair plummeting over 100 pips and trading at its lowest in two weeks, below the 0.7200 level. The 1 hour chart shows that, despite the technical indicators are holding in extreme oversold levels, they maintain their bearish slopes, whilst the price has accelerated sharply lower and stands far above the current level. In the 4 hours chart, the technical bias is also bearish, as the technical indicators head south below within oversold territory, and the price is currently extending below its 20 SMA and the 200 EMA.

Support levels: 0.7160 07130 0.7100

Resistance levels: 0.7200 0.7240 0.7280

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